87yr old father will be 99 when interest only mortgage expires - was he mis-sold?

ViolaLass

If they can afford a repayment loan then there's your solution.

A_Nice_Englishman

I wonder if they said to their son "regard this money as your inheritance. We will be leaving everything else to your siblings"?

GDB2222

Teabay wrote: »

I guessed I'd be selling the house and paying it off with the proceeds, yes.
Money savvy - I think I'm annoyed that they didn't tell my brother to get a grip and build his own debts, and that they took on an interest only mortgage when they could have afforded a repayment loan!
It's likely that my dad will make 99, maybe independently. At 87 he's still driving, giving talks, going to the city for concerts etc at least twice a week - in fact, he's out more than me!
Is there a benefit or a drawback to me going on a repayment mortgage with him right away? Any tax / inheritance drawbacks?
Thank you for your advice and patience!

No tax/inheritance tax issues, assuming his entire estate is within the £325k IHT nil rate band when he dies.

There is no benefit in your 'going on' his mortgage, whatever that actually means. I think you mean that you want to take on responsibility for his debt and start paying it off. But, I thought that the whole point of this thread was that you were worried about finding yourself responsible for the debt when he dies (which you won't be)? So, why take on this burden voluntarily?

What you could do is give him a few thousand pounds a year for him to use to repay the mortgage. I reckon about £4000 a year should do it. But, you should consider instead saving that money yourself in an ISA, and hopefully you'll have the best part of the £59,000 saved by the time he reaches age 99, or maybe more, depending how your investment does.

If you do give him the £4k a year, the downsides are:

• It increases his assets, and it may all go in care home fees.
• He may change his will and leave everything to the cats and dogs home.
• He may give more of his money away to what you regard as undeserving causes. He has form on this!

silvercar

Arguably, better to be given a mortgage that lasts till your 99 than one that ends when you are 80. When he is 99 he can sell up and use the remaining equity to buy a smaller place outright, rent a retirement home or live with you. He's saved a lot by lower interest charges than equity release.